In this edition of Lens on Markets,
Market Commentary
South African Market Summary
South African equities ended lower on Wednesday, with the JSE All Share declining 0.41% to 113,551.10 and the Top 40 falling 0.48% to 105,986.21. Domestic economic data were more encouraging, as July retail sales increased 3.4% year on year following a revised 1.1% rise in June, while seasonally adjusted sales advanced 2.5% month on month. Inflation expectations stabilised in the third quarter after rising sharply previously amid the oil-price shock. Average expectations for 2026 remained unchanged at 4.4%, while forecasts for 2027 and 2028 eased to 4.0% and 3.8%, respectively. Headline consumer inflation was 4.3% year on year in July. Despite the stronger retail activity and steadier inflation outlook, the rand weakened as investors awaited the Federal Reserve’s policy decision.
European Market Summary
European equities recovered modestly on Wednesday, with the STOXX 600 rising 0.5% to 637.09 as easing oil prices improved risk appetite ahead of the Federal Reserve decision. Eurozone labour-cost growth slowed to 3.1% year on year in Q2 from 3.3%, while negotiated wage trends pointed to only a mild acceleration ahead, offering the ECB some reassurance that higher energy prices are not yet driving a broader wage-price spiral. The ECB has already raised rates twice this year but continues to signal that only moderate further tightening may be required. In the UK, inflation accelerated to 3.1% in August, a five-month high, although underlying measures remained stable ahead of the Bank of England’s policy decision. WH Smith guided FY26 headline pre-tax profit to around £75 million, the bottom of its previous range.
US Market Summary
US equities turned lower on Wednesday after the Federal Reserve unanimously raised its policy rate by 25 basis points to 3.75%–4.00%, its first increase in more than three years, as policymakers responded to persistent inflation pressures. Sixteen of 18 officials projected at least one further 25bp increase during 2026, reinforcing expectations of renewed monetary tightening. Economic data supported the hawkish stance, with August retail sales rising 1.2% month on month against expectations for 0.8%, while core sales increased 1.4%. Import prices climbed 0.7% monthly and 7.0% annually, the strongest year-on-year increase since August 2022. In corporate news, Goldman Sachs CEO David Solomon warned that third-quarter FICC activity is likely to soften from recent levels and that investment-related performance will be considerably more subdued than in Q2.
Asian Market Summary
Asian equities edged higher on Thursday as investors assessed the Federal Reserve’s first rate increase in more than three years, with easing bond-market pressure supporting sentiment. Attention has shifted to the Bank of Japan, which is expected to raise rates on Friday to a 31-year high, with Governor Kazuo Ueda’s guidance on further tightening likely to influence Japanese assets and the yen. China’s August industrial production increased 5.2% year on year, beating expectations and accelerating from July, while retail sales growth slowed to 0.4%. Fixed-asset investment declined 7.2% during the first eight months. Corporate developments included continued scrutiny of potential US memory-chip manufacturing cooperation between SK Hynix and Intel, while JERA expects to expand LNG sales outside Japan as it grows its regional trading operations.
Commodity Market Summary
Oil prices extended losses on Thursday as Saudi Arabia offered additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, easing concerns over supply disruptions following attacks on the East-West pipeline. Prices had reached four-month highs earlier in the week after loadings at Yanbu were suspended and some European cargoes cancelled. Geopolitical risks remain elevated as fighting between Saudi forces and Iran-backed Houthis intensified, while repair timelines for damaged pipeline infrastructure remain unclear. US crude inventories fell by about 640,000 barrels last week, below expectations for a 1.62 million-barrel draw, adding further pressure to prices. Meanwhile, gold gained more than 1% as investors assessed the Federal Reserve’s latest rate increase and indication of further tightening, while the earlier oil-price rally lost momentum.
Currency Market Summary
The South African rand weakened on Wednesday despite stronger-than-expected retail sales and stable inflation expectations, as investors awaited the US Federal Reserve’s policy decision. The dollar subsequently climbed to a seven-week high after the Fed unanimously raised interest rates under new Chair Kevin Warsh and signalled further tightening, with officials projecting another increase before the end of 2026. US Treasury yields also moved higher as markets absorbed the more hawkish policy outlook. The dollar index strengthened to 100.33, its highest level since 31 July. Attention now shifts to the Bank of England’s policy decision later on Thursday and the Bank of Japan on Friday,
Domestic Company News
Montauk Renewables Inc. (MKR) +1.29%
Montauk Renewables has opened its Turkey, North Carolina facility in Sampson County, representing a $200 million agribusiness investment and expanding the company’s renewable energy footprint. By the end of August, Montauk had secured long-term agreements with more than 80 farming locations, providing access to over 415,000 hog spaces targeted for the first phase of development. The facility converts swine waste into electricity using proprietary technology, while also producing biochar intended to improve nutrient and water retention in agricultural soils. The project redevelops the former Bay Valley Foods Distribution Center and is expected to support local employment and broaden the county’s tax base. Montauk specialises in capturing methane and converting biogas into renewable natural gas or electricity, with operations and development projects across several US states.
Pan African Resources Plc. (PAN) +5.60%
Pan African Resources delivered record FY26 operational and financial performance, with gold production rising 38.6% to 272,310oz and revenue increasing 114.2% to US$1.16 billion, supported by a 54.8% higher average gold price. Profit surged 153.8% to US$356.9 million, while HEPS increased 199.5% to US17.64 cents. Operating cash flow rose 259.6% to US$557.0 million, moving the group from US$150.5 million net debt to US$185.8 million net cash. A record final dividend of 65 cents per share was proposed, taking the FY26 total to 77 cents, alongside a share buyback programme. FY27 production guidance is 280,000oz–302,000oz, although AISC is expected to increase to US$2,075/oz–US$2,175/oz. Growth projects include White Devil, Royal Sheba, Soweto Cluster and Poplar, while the Emmerson Resources acquisition expanded the group’s Australian exposure.
Supermarket Income REIT PLC (SRI) +0.61%
Supermarket Income REIT reported FY26 portfolio growth of 23.7% to £2.01 billion after acquiring £454 million of properties and expanding its Blue Owl joint venture to £855 million. IFRS EPS increased 39.4% to 6.9 pence, while EPRA EPS declined 4.1% to 5.7 pence. The declared dividend increased 1.0% to 6.2 pence per share, with dividend cover easing to 93%. EPRA NTA rose 0.4% to 87.5 pence per share, while the EPRA cost ratio improved materially to 9.2% from 13.0%. Loan-to-value increased to 43.9% from 31.1% following portfolio expansion. The group delivered a 7.5% total accounting return and is targeting sustainable minimum annual dividend growth of 2% from FY27, supported by resilient grocery-sector fundamentals and further acquisition opportunities.
EPE Capital Partners Limited (EPE) 0.00%
EPE Capital Partners expects NAV per share of R5.40–R5.70 at 30 June 2026, representing a 33%–37% decline from R8.57 a year earlier, following substantial portfolio realisations and distributions to shareholders. The partial sale of Optasia through its November 2025 IPO generated R360 million, while the Residual Assets sale delivered R660 million in cash proceeds. These transactions enabled more than R1.03 billion of value to be returned through the R171 million unbundling of Brait Exchangeable Bonds and an R854 million pro rata share buyback. Following these disposals, Optasia is the company’s sole remaining investment. Ethos Capital will continue seeking an optimal outcome for this holding, with a disposal completing its realisation strategy. Full-year results are scheduled for release on 23 September 2026.
Global Company News
Lennar Corporation (LEN) -2.14%
Lennar reported third-quarter 2026 net earnings of $284 million, equivalent to $1.19 per diluted share, or $1.23 excluding technology investment mark-to-market losses and selected one-off items. Revenue totalled $8.0 billion, while home deliveries declined 3% to 20,840 and new orders fell 9% to 20,879. Backlog stood at 16,857 homes valued at $6.3 billion. Homebuilding generated operating earnings of $502 million, with a 15.8% gross margin and 6.6% net margin on home sales. Financial Services contributed $129 million of operating earnings, while Multifamily recorded a $3 million loss. Lennar ended the quarter with $1.2 billion in homebuilding cash, repurchased $256 million of shares and reported homebuilding debt to total capital of 16.6%.
Boeing Company (BA) -3.69%
Boeing said stabilising 737 MAX production at 47 aircraft per month is taking longer than expected, partly due to insufficient wing output. The company must increase wing production and certify its new Everett line before targeting 52 jets monthly in 2027. CEO Kelly Ortberg expects certification of the 737-10, which represents about 30% of 737 orders, very soon. Boeing’s planned increase in 787 production to 10 aircraft monthly is also being delayed by engine shortages and slow premium-seat certification. CFO Jay Malave consequently expects 2026 free cash flow closer to $2 billion rather than the $3 billion upper end of guidance. Ortberg also tempered expectations for another major Chinese aircraft order during next week’s US-China political summit.
Click here for the daily moves of shares, indices and currencies.
Research Team